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What Age Should I Consider Retirement & What is the Average Nationwide Retirement Cost

Many people wonder when the best retirement age is but the truth is, there are A LOT of variables. There’s a lot more to retiring than what meets the eye, so let’s take a look at when the best age is for YOU to retire.

It used to be a common belief that the best retirement age is 65. That is no longer true. The perfect age to retire actually depends on what you want out of your retirement. Medicare coverage and social security benefits are prime things to consider.

Retiring Based On Medicare

Many people choose their retirement age based on their Medicare eligibility. Medicare can be a very helpful and inexpensive form of insurance for retired individuals so it makes sense that many people base their retirement on Medicare. The reason why many people choose to retire at age 65 is because that is when you are eligible for Medicare.If you are to retire before turning 65, insurance would be much more costly, and you wouldn’t get the same coverage as you do with Medicare.

Social Security Benefits

Social Security is also another huge aspect of choosing your perfect retirement age. It is definitely more advantageous if you wait longer to retire. It is possible to receive Social Security when you turn 62, but in order to take full advantage of the benefits, it’s best to wait until at least the age of 65. If you can wait a few more years, you will receive greater benefits.

Taking Advantage of Social Security

Social Security is available to anyone that is 65 years of age that was born before 1960.  If you were born after, the age to receive these benefits is unfortunately 67. So that is another thing to keep in mind if you are trying to find the perfect age to retire.

Waiting to Collect Social Security

Another reason why waiting longer to collect social security is beneficial is because the longer you wait, the more money you will be able to collect. If you were to wait just 5 years longer you would notice a huge difference in the amount of money that you will be able to collect from Social Security.

It’s Your Decision

While there are obviously huge benefits to retiring late, the decision as to when you retire is ultimately up to you. Some people retire before they even turn 60 and others wait until their 70’s. While there are more financial benefits to retiring later, it may be hard for some to wait that long.

Costs of Retiring

To understand how much it costs to retire, you first need to understand the fundamentals of retiring. Retiring basically means that you need to save up enough money throughout your life to support yourself when you retire so you don’t have to work.There are many costs to consider when you are retiring so let’s take a look at some of the biggest expenses.

Housing Costs to Consider

When considering your retirement age, it is important that you consider the most important cost, housing. Housing for retired people costs around $14k per year, so it is important that you account for this when planning your retirement.

Calculating Food Costs

People who are retired typically spend much less on food than younger people. This is because retired people typically don’t eat out as much and their meals are more simple. With that in mind, the average cost of food for a retired person is about $5k a year.

Transportation Costs

Transportation is an important part of everyday living, although those who retire typically don’t need to drive as much because they no longer need to go to work. Driving is still an essential part of living – retired or not, but the average retired person spends about $7k a year on maintenance of a vehicle and transportation.

Health Care Costs

No doubt, one of the most important expenses for a retired person is health care. Now, we mentioned Medicare earlier but there are also other health care costs that Medicare may not cover. Altogether though, you can expect to pay about $5k a year on health care.

Keeping Yourself Entertained

Now that you’re not working, you may want to have some fun in your free time! It is important to consider the cost of recreational activities as well when planning your retirement. The average amount of money that a retired person will spend on recreation is about $2k a year.

Considering all the factors above will aid you in choosing the best retirement age. Consider your needs and choose the plan that works best for you.